Circle CEO & Founder | Jeremy Allaire Interview (2020)
To be rude but like what? What are you thinking I got into what were the crypto show proudly sponsored by the Baseball Hall? Of course and have a look. Today's guest co founder and. Ceo OF CIRCLE IS JEREMY. How am I great? Thanks for having me. Excellent great to have you on the shy joining us so a little bit new things going on circle that a lot of the conversation prior to now. Hopefully when we're GONNA have has basically just because you've been sponsored all your investment over Rice or whatever you WANNA call from Goldman Sachs. Let's get into what the big patriots circle. Yeah I mean so we've been In the CRYPTO SPACE. For about six years and you sort of maybe just going back when we started the company. The thing that got us really excited was this idea. That effectively like new protocols would emerge for value chains on the Internet. That would make it possible for people everywhere to exchange value with each other at the speed of the Internet and the same way we can share data and content. And we've been pursuing that obviously for a number of years I think ultimately the we're interested in both how does what we think of as traditional kind of payments and banking become crypto native and be open accessible open finance concept that a lot of people talk about and then further to businesses ultimately use this as a way to raise capital enter into economic arrangements? Other things so the kind of big picture that got US interested Six years ago. I think what's interesting now is. We've had lots of innovations products pivots businesses. We've acquired businesses. We spun out like other things along the way but I think the thing is now six years in the technology things that we're working on but then more broadly is finally getting to a place where we can actually implement this more open. Financial System built on Krypton native infrastructure of the spin off even quite companies built. Some spun off I read recently. The tunnel polonius elsewhere. An exchange that sort of we there the clinics Knicks so we acquired pontiacs in early in the first quarter of two thousand eighteen and the history of plenty is the founder of pontiacs was mining coins. Back in two thousand fourteen. And there's nowhere to sell them so he built an exchange where you can sell all coins and Was sort of very very primary. Old Coin Exchange is the first exchange to list of theory him sort of very much at the cutting edge of new projects and things and then in twenty seventeen when the market For digital assets took off they saw really explosive growth for quite some time as actually number one number two marketshare exchange in the world. I think ran up against as a US based company started to run up against the regulatory things that we're starting to happen with the SEC The requirements or running. Something at that scale where really difficult and We had known them and worked with them. They'd worked with our OTC desk. And I think they were looking for a company that could help you to take over and and take it forward. We closed the deal again in q one of two thousand eighteen right is the market was starting to really decline them off and it was interesting to watch over the course of two thousand eighteen and into twenty one thousand nine hundred effectively. We saw rapid growth in non. Us international exchanges in particular out of Asia who play different set rules and work so concerned with us regulatory situations and then at the same time the regulatory environment in the US for exchanges especially for broad-based crypto changes. That wants for lots of different projects. Gotten much much worse and we were pretty outspoken about that but I think ultimately we reached a place where our view that plenty ex to continue to compete as a Haiku exchange needed to have the level of capital and the ability to operate internationally without the burden of the US and so We yeah we read recently spun plenty out. The leadership team and management has gone. It's now out of an Asian investment group and it's an international focus and unfortunately it's part of that we did announce it we're winding down the US portion of it so US customers can no longer trade in and actually have to withdraw their assets from the platform so that was one of the photos. Having was She had two choices. Celta Niger Secretary. By so business or area or over there restructured old. Recent was that ever an option or is it just too much going on to the metal. Yeah I mean I think that there. There's a there's a real difference between a US based company that trying to build something to operate in Asia versus. You know more Asian central operations and I think the other pieces I think just the capital investment required is is is really significant and so you know the the investment group that we spend it out to is investing over one hundred million dollars into the business and I think that's great and that's critical and I think it's it's exactly what it needs a fantastic. Let's go into the next two inches. They see invested the company's doing something that will allow you to talk to the lines. If I remember correctly say into companies to help them get going towards coal Sayed yes so seed. Invest is also a company that we acquired and we closed that. We close that deal on q one of this year and seed. Invest is really interesting company. They've been around for about five years and basically in the. Us A whole new set of laws were passed over the prior years that were like crowdfunding laws so basically laws that allowed platforms and companies to issue securities and sell them and market them directly to investors on the Internet and then also opened that up not just to sort of accredited sort of wealthy people investors but also to unaccredited investors so the average person could for the first time essentially invest in like venture capital like companies and startups in so season-best grew over several years to be the largest equity crowd funding platform in the US. It's a regulated broker dealer also approved as what's called an ATS which allows for secondary trading of those securities and have helped hundreds of companies raise hundreds of millions of dollars issuing these securities on the Internet. When you think about crypto and you think about things like token offerings or digital assets you know in in some ways like what a lot of did in two thousand seventeen were unregistered securities offerings. So right and what? What are you getting so our view in this goes back to like founding vision circle is financial contracts will become executed in code. They'll become you know crypto native and those financial contracts will be token is meaning. There will be this at the public. Blockchain's will be the settlement ledger for those and but sophisticated financial contracts like equity company or lending contract where a debt contract or a labor contractor any type of economic arrangement that you can tow defy literally. We'll move to these these blockchain's and so but that's GonNa have to work within the existing framework for securities not just in the US but around the world and so for us we wanted to converge sort of platforms that allow for capital formation and securities issuance on the Internet with crypto. So we're in the process of doing that. So that companies can issue digital assets and have those beef investable and tradable and other things through that through the CMS platform. So how does it work for for the company? So that you can come. So I'd say twenty percent equity that you would like to bring to the platform and the market saw process with you issue. A PRICE YEAH. You issue a price. Yeah and so one of the things that we do is we help the company figure out. What's the structure of the offering? What's ultimately what do we think the right raises? What do we? How do we think about valuation? They may have specific view on it and wanted to be executing that. But we're only going to take on a project if we think that we can fill that deal. Basically so we've got a large base of investors have already invested into deals on our platform and that just grows every time we add a new deal to the platform and sometimes these are pieces of capital. That accompanying maybe. They've closed some capital from angels. Or but they won't have a piece of it that they could sell the crowd so they'll.